Citing "a person with knowledge of the negotiations," the Journal said the companies were in advanced stages of negotiations on a deal potentially worth $12.8 billion.
The deal could result in a full purchase of Sprint Nextel or a smaller stake. The Journal said a two-thirds stake was a possibility, but there was also a chance the dealing could stop short of any agreement.
Softbank is Japan's third largest telecommunications company in terms of subscriptions. Sprint Nextel, although far smaller than Verizon Wireless or AT&T, has solidified its eroding business in recent years after customers fled the company when Sprint merged with Nextel in 2005.
Currently, Sprint is about half the size of Verizon and AT&T, each of which boasts about 100 million subscribers, the Journal said.